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Unless you live in the downtown core, having a car is a necessity in Canada. Outside of city centres, public transit is not readily available. That leaves Canadians with little option other than to have a vehicle at their disposal to get around. This is especially true in rural parts where residents have a long way to go when commuting from point A to point B.
But vehicles are expensive these days. Coming up with a few thousand dollars up front in one lump sum can prove to be a nearly impossible feat for most Canadians, no matter how hard they work.
Luckily, there are car loans available that can help Canadians make a large purchase like this to get access to a vehicle they need to go to work every day and carry out daily errands.
Having said that, it’s important for consumers not to assume any more debt than necessary. While having access to a car loan may be helpful, it’s essential to stick to vehicles that are within a person’s budget. Read on to find out more about car loans in Red Deer.
What should you do if your loan is more than your car is worth? Click here to find out.
What Types of Vehicles Can a Car Loan Help You Buy in Red Deer?
Car loans Red Deer are pretty much available for the purchase of any type of vehicle. The one you choose will depend on your specific needs and budget. You can expect to be able to choose from a wide range of vehicles when financing with a car loan, including the following:
- Compact cars
- Sports cars
- Luxury cars
Check out this infographic for everything you need to know about auto financing.
Why Do Consumers Need Car Loans Red Deer?
There are several reasons why an individual in Red Deer may require the assistance of a car loan to help them finance a vehicle purchase:
- Vehicle prices are far too much for the average person to be able to afford without some financial assistance
- To upgrade a current car model
- To get a bigger vehicle to accommodate a growing family
- To get a more reliable vehicle that won’t break down on the way to work
- To swap an old, unreliable car for a newer one
What are lenders looking for when they financing a private sale vehicle? Find out here.
Bad Credit Car Loans in Red Deer
When you apply for a car loan in Red Deer, there are a few factors that your lender will look at before they agree to provide you with the money needed to fund your vehicle purchase, and your credit score is one of them. Preferably, your credit score should be at 680 or higher.
Lenders in Red Deer expect borrowers to have a decent credit score in order to grant loan approval because a higher credit score paints the picture of a more responsible borrower who will not default on their loan payments.
If you have a bad credit score, you may have to seek out a loan with an alternative lender other than your bank or another traditional lender. These bad credit lenders work with borrowers in Red Deer with sub-par credit scores and focus more on a borrower’s income, assets, and most recent payment history.
You can also improve your chances of getting approved for these types of loans by coming up with a bigger down payment.
But bad credit car loans typically come with interest rates that are a lot higher than those of conventional car loans. As such, you’ll need to be prepared to spend more on your overall car loan.
Otherwise, you can take the time and put in some effort to improve your credit score, which can be done by:
- Making all bill payments on time
- Spending less than 20% of your credit card limit every month
- Not taking out any new loans or credit cards
- Making full credit card payments as opposed to minimum payments
Take a look at this infographic for even more information about credit scores in Canada.
Borrow Against Your Car With a Vehicle Title Loan
If you already own a vehicle, you may be able to use it to secure a loan for yourself. If you need to borrow money for whatever reason at some point, your vehicle could provide you with a source for collateralizing a loan.
A vehicle title loan is particularly attractive for borrowers in Red Deer who have a bad credit score and are unable to get approved for a conventional loan. They’re also great for those who may have decent credit, but who may want to get access to a larger loan than what their lender may be willing to provide them with.
Vehicle loans work by allowing a leader to place a lien on the title of your car in exchange for borrowed funds. Further, the hard copy of the vehicle title must be temporarily surrendered. Once the entire loan amount is paid off, the lien will be removed and the hard copy of the title will be returned.
You must own the vehicle outright in order to take advantage of a vehicle title loan, which means you cannot have a car loan that you’re still paying off. Further, the vehicle must have some sort of value in order for it to be able to effectively collateralize a loan.
For more information on vehicle title loans, check out this article.
Recreational Vehicle Loans in Red Deer
As already mentioned, there are several types of vehicles that can be financed with a car loan in Red Deer. But the purchase of recreational vehicles can also be financed, though you may need to get a loan that’s more specific and tailored to these types of vehicles, which can include:
- Dirt bikes
Recreational vehicle loans typically range in length from 10 to 15 years, though you may be able to get an extension to up to 20 years for larger loans with collateral that qualifies you for the loan. Terms and interest rates for recreational vehicle loans are usually the same or similar to those for conventional car loans.
Can’t decide between a new car or a used one? This infographic is for you.
Can I Trade in My Old Car?
In order to reduce the price of a new car that you want to buy in Red Deer, you may be able to trade in your old vehicle and use its value to be put toward another car purchase. In essence, your old vehicle’s value would be used as a down payment towards a new car loan.
For instance, if your old car is deemed to be valued at $2,000, that money would be used toward the purchase of your new car. Vehicle trade-ins are available at most dealerships and are a great way for consumers to cut down on the cost of a new car.
If you still owe money on the car that you’re trading in, the dealer may agree to pay off the remainder of the loan (as long as your car is worth more than what’s owed), which will take the lien off the title (for more information about this, click here). The remainder will then be put towards the car purchase.
For instance, if your car is worth $2,000 and you still owe $1,500 on your current loan, that money will be paid off with the trade-in and the remaining $500 would be used towards your new car purchase.
If you owe more on your old car loan that what your trade-in is worth, whatever loan amount that remains will be rolled into your new car loan. For example, if your car is worth $2,000 but you still owe $3,000 on your current car loan, that remaining $1,000 would simply be rolled into your new car loan.
Just be aware that used cars may not be worth as much as you think. Your dealer may offer you less than what you believe your car is worth. It’s important to understand the concept of depreciation, as vehicles lose value the moment they’re driven off the dealership lot.
Check out these cars that have a high trade-in value, click here.
Need a Car Loan?
Car loans in Red Deer can make it relatively easy to get your hands on a car that you really need but may not necessarily be able to afford on your own. If you’re in need of a new vehicle and require some financial assistance to make a purchase, Loans Canada can help.